EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0812465
Customs Act 1901
Background
Part XVA of the Customs Act 1901 (the Act) sets out a scheme under which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs (the CEO). A lower rate of customs duty applies to goods that are the subject of a TCO.
Under section 269F of the Act, a person may apply to the CEO for a TCO in respect of goods. If the CEO is satisfied that the application is not in respect of goods specified in section 269SJ of the Act, which sets out those goods that cannot be subject to a TCO, the CEO must decide whether the application meets the core criteria.
Section 269C of the Act provides that a TCO application meets the core criteria if, on the day on which the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269B of the Act provides that ‘goods produced in Australia’ has the meaning given by section 269D, ‘ordinary course of business’ has the meaning given by section 269E and ‘substitutable goods’ in respect of goods the subject of a TCO application, means goods produced in Australia that are put, or are capable of being put, to a use that corresponds with a use (including a design use) to which the goods the subject of the application can be put.
Subsection 269P(3) of the Act provides that if the CEO is satisfied that a TCO application meets the core criteria, the CEO must make a written order (a TCO) declaring that the goods the subject of the TCO application are goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (the Tariff) specified in the order applies.
Hillmark Industries applied for a TCO in respect of certain vacuum seal storage bags on 12 June 2008.
Instrument
TCO No 0812465 was made on 22 August 2008. It declares that those certain vacuum seal storage bags are goods to which item 50 of Schedule 4 to the Tariff applies since the CEO was satisfied that no substitutable goods were produced in Australia. The general rate of duty on these goods is 5%. The rate of duty for the goods subject to the TCO is free.
Consultation
Subsection 269K(1) of the Act provides in part that as soon as practicable after accepting a TCO application as a valid application, the CEO must publish a notice in the Gazette which includes an invitation to any person who considers that there are reasons why the TCO should not be made to lodge a submission with the CEO. The CEO did not receive any submissions in response to this invitation.
Commencement
Subsection 269S(1) relevantly provides that a TCO is to be taken to have come into force on the day on which the application for the TCO was lodged. TCO No. 0812465 is taken to have come into force on 12 June 2008.
The TCO does not affect the rights of a person (other than the Commonwealth) as at the date of registration so as to disadvantage that person or impose liabilities on a person (other than the Commonwealth) in respect of anything done or omitted to be done before the date of registration. The rights of importers will be beneficially affected. Under paragraph 126(1)(r) of the Regulations, importers of such goods will be able to apply for a refund of duty on goods imported since the day on which the TCO is taken to have come into force. The TCO does not impose any liabilities on any person.
Overview
The Customs Act 1901, enacted by the Australian Parliament, establishes a framework for the administration of customs duties and tariffs, and includes provisions for Tariff Concession Orders (TCOs). These TCOs allow for reduced customs duty rates on certain goods, provided they meet specific criteria. The Tariff Concession Instrument No. 0812465, made under the authority of the Act, aims to address a particular need by providing tariff concessions for certain vacuum seal storage bags, as identified in the explanatory statement. The Chief Executive Officer of Customs issued this instrument after determining that no substitutable goods were being produced in Australia at the time of the application, thus satisfying the core criteria set out in section 269C of the Act. The instrument was published in the Gazette with an invitation for submissions, though none were received. The tariff concession became effective from the date the application was lodged, providing beneficial rights to importers and avoiding any retroactive imposition of liabilities.
Scope and Application
The Customs Act 1901, under Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) through the Chief Executive Officer of Customs (CEO). This Act applies to entities or individuals who seek a lower rate of customs duty for specific goods through a TCO application. A TCO can be applied for if the goods in question are not specified in section 269SJ of the Act, which lists those goods that are ineligible for tariff concessions. The core criteria for approving a TCO, as stipulated in section 269C, include the condition that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. The CEO is mandated to make a written order if the application meets these criteria, specifying the reduced duty rate applicable to the goods. The application process requires the CEO to publish a notice in the Gazette, inviting any interested party to submit objections, although no submissions were received in the case of TCO No. 0812465 for vacuum seal storage bags. The TCO comes into effect on the day the application is lodged, with the rights of importers being beneficially affected as they can apply for duty refunds from the effective date. The legislation ensures that no existing rights of persons, other than the Commonwealth, are adversely affected or new liabilities imposed due to the TCO.
Key Provisions
The main sections of the Tariff Concession Instrument No. 0812465, pursuant to the Customs Act 1901, are section 269C, 269F, 269P, and 269SJ. Section 269F allows for the application for a Tariff Concession Order (TCO) by a person to the Chief Executive Officer of Customs (CEO). If the application meets the core criteria set out in section 269C, the CEO must make a TCO, as stipulated in section 269P(3). The TCO declares that the goods in question are to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies, providing a lower rate of customs duty. Section 269SJ sets out goods that cannot be subject to a TCO. In this case, the CEO issued TCO No. 0812465 on 22 August 2008, declaring that certain vacuum seal storage bags are goods to which item 50 of Schedule 4 to the Tariff applies, resulting in a duty-free rate.
The obligations imposed by the Act on the parties involved include the requirement for the CEO to assess whether the TCO application meets the core criteria. The CEO must also publish a notice in the Gazette, inviting any person who considers that there are reasons why the TCO should not be made to lodge a submission. This requirement is outlined in subsection 269K(1). In this case, no submissions were received in response to the invitation. Additionally, the Act ensures that the rights of a person (other than the Commonwealth) as at the date of registration will not be disadvantaged, and no liabilities will be imposed in respect of anything done or omitted to be done before the date of registration, as provided in subsection 269S(1).
The Act also outlines potential consequences for breach. Under subsection 269P(3), if the CEO is not satisfied that the TCO application meets the core criteria, they are not required to make a TCO. However, the Act does not specify any criminal or civil penalties for non-compliance with the requirements of the TCO process. Instead, the focus is on ensuring that the application process is transparent and that any interested parties have the opportunity to provide input before a decision is made. It is worth noting that the Act does not impose any liabilities on any person, as stipulated in subsection 269S(1).